The Conservative Government is committed to keeping taxes low, returning to balanced budgets and respecting taxpayers’ dollars.
The reforms, introduced in the Jobs and Growth Act, 2012, will see contribution rates for public service employees, MPs and Senators moving to a 50-50 cost-sharing model.
These landmark reforms bring public sector and MP pensions more in line with the private sector, resulting in substantial savings for taxpayers. Having Members of Parliament and the public sector pay their fair share of pension contributions is the right thing to do, and I am proud to be part of the government that ushered in these changes.
Public service employees will go from paying 37 per cent of their pensions to 50 per cent by 2017. The age of retirement for new federal workers will also increase from 60 to 65 years of age in recognition of the country’s changing demographics. Canadian Forces and RCMP contributions will also increase in alignment with the rest of the public service.
Members of Parliament will see their contributions rise from 14 per cent to a 50-50 per cent cost-sharing over the same five year period. In concrete terms, a MP will go from paying $11,060 of his or her pre-tax salary in pension contributions, to $38,769 by 2017. The age at which a MP can begin collecting a full pension will also rise from 55 to 65 by 2016.
These important changes not only ensure the public sector and MPs are paying their fair share, but will result in billions in savings. By 2017, the changes to MP pensions will garner $29-million in combined savings. Changes to the 420,000-strong public sector pension regime will bring total cumulative savings to $2.6 billion in taxpayer dollars over the same period.
These reforms mark a sea-change in public pension management and underscore our continued commitment to returning to balanced budget, low taxes and respect for your tax dollars.